December 21, 2013

Years Late, NYT Discovers Obamacare Premiums Are Whacking the Upper-Middle Class

In January 2010, Robert Rector at the Heritage Foundation studied the draft language in what ultimately turned into the Patient Protection and Affordable Care Act, or what came to be known as Obamacare. His two most important findings: 1) Obamacare would encourage divorce while discouraging marriage; 2) Individuals and couples earning what most would consider to be nice but certainly not opulent incomes — especially those aged 50 and above — would pay disproportionately high premiums, while those making just a few thousand dollars less per year would, after subsidies, pay far less. Yours truly has made these points subsequently on several occassions (examples here, here, and here).

Well glory be, almost four years later, acting as if they’re breaking some kind of new ground, Katie Thomas, Reed Abelson and Jo Craven McGinty at the New York Times have discovered that “the cost of premiums for people who just miss qualifying for subsidies varies widely across the country and rises rapidly for people in their 50s and 60s.” Imagine that. Even then, the Times trio pegged the suffering Obamacare is inflicting to gross income and not net — and the difference is stark. Excerpts, beginning with a weak headline, follow the jump (bolds are mine):

New Health Law Frustrates Many in Middle Class (“Frustrates?” How about “Rips Off”? — Ed.)


Ginger Chapman and her husband, Doug, are sitting on the health care cliff.

The cheapest insurance plan they can find through the new federal marketplace in New Hampshire will cost their family of four about $1,000 a month, 12 percent of their annual income of around $100,000 and more than they have ever paid before.

Even more striking, for the Chapmans, is this fact: If they made just a few thousand dollars less a year — below $94,200 — their costs would be cut in half, because a family like theirs could qualify for federal subsidies.

The Chapmans acknowledge that they are better off than many people, but they represent a little-understood reality of the Affordable Care Act. While the act clearly benefits those at the low end of the income scale — and rich people can continue to afford even the most generous plans — people like the Chapmans are caught in the uncomfortable middle: not poor enough for help, but not rich enough to be indifferent to cost.

“We are just right over that line,” said Ms. Chapman, who is 54 and does administrative work for a small wealth management firm. Because their plan is being canceled, she is looking for new coverage for her family, which includes Mr. Chapman, 55, a retired fireman who works on a friend’s farm, and her two sons. “That’s an insane amount of money,” she said of their new premium. “How are you supposed to pay that?”

An analysis by The New York Times shows the cost of premiums for people who just miss qualifying for subsidies varies widely across the country and rises rapidly for people in their 50s and 60s. In some places, prices can quickly approach 20 percent of a person’s income.

Experts consider health insurance unaffordable once it exceeds 10 percent of annual income.

Some experts dismissed the varying effects of the income cutoff, saying the law’s main elements benefit most of those who could not previously buy insurance.

“I think that job one was to make sure that the people who clearly have the greatest difficulty affording premiums receive the greatest help,” said Ron Pollack, the founding executive director of Families USA, a consumer advocacy group that favored the law.

Families USA is not “a consumer advocacy group.” Even Wikipedia calls it a “liberal non-profit consumer health-care advocacy organization.”

Families USA is hardly an impartial participant in the health care debate. Wiki notes the following, with supporting links:

In 2013 Families USA was given a $1 million grant by the Robert Wood Johnson Foundation for publicizing ObamaCare success stories. They are also closely tied to the Obama administration and the ACA enrollment group Enroll America, which is located in the same office.

So please, guys. Ron Pollock isn’t an “expert.” He’s “an Obama administration apparatchik.” And his dismissal of middle Americans who are taking annual hits of thousands of dollars to their net pay is outrageous.

Take the aforementioned Chapmans. They may gross $100,000 per year, but chances are that their take-home pay after federal, state, and local income taxes, and the Social Security-Medicare payroll tax is no more than $70,000 (luckily for them, “New Hampshire does not have an income tax on an individual’s W-2 reported wages or a general sales tax”). The Obamacare related premium increase of $335 a month ($1,000 minus their current $665 noted in unexcerpted text), or just above $4,000 per year, extracts almost 6 percent of their take-home pay. Their total new premium of $12,000 per year will be almost 16 percent of their net pay. The “10 percent of gross” guideline “experts” are using is inadequate, as it doesn’t take the confiscatory nature of “progressive” taxation into account.

The Times should have covered this matter during the year before the Affordable Care Act was passed in 2010. But it was too busy acting as a cheerleader instead of as a curious and objective objective observer. If the Chapmans and others portrayed in the article can fairly assign a portion of the blame for why they are in the positions in which they find themselves to the Times, which refused to do its job when it mattered most.

Cross-posted at


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